Eurozone output hits record low
Many European carmakers such as VW are tightening their belts as consumers pull back from new car purchases. Sean Gallup/Getty Images
Friday November 21 2008
Europe's manufacturing and service industries contracted in November at the fastest pace in at least a decade, extending a slump that has already pushed the economy into a recession.
Royal Bank of Scotland Group Plc's composite index dropped to 39.7, the lowest since the survey began in 1998, from 43.6 in October, Reuters reported. Economists forecast a decline to 42.8, according to the median of 16 estimates in a Bloomberg survey. The index is based on a survey of purchasing managers by Markit Economics in London and a reading below 50 indicates contraction.
Europe's economy fell into its first recession in 15 years in the third quarter after the worst financial crisis since the Great Depression pushed up lending costs, hurt export demand and eroded confidence. BASF SE, the world's largest chemical company, this week lowered its profit forecast for the second time and said it plans to idle 80 factories after customers reduced orders.
''The key picture from the numbers is that confidence in the euro-area economy remains incredibly weak,'' said Ben May, an economist at Capital Economics in London. ''It points to a further contraction in output in the fourth quarter.
Markit's manufacturing index dropped to 36.2 from 41.1 in October, while the services index fell to 43.3 from 45.8. The report also showed that prices charged in both industries declined. (Bloomberg)
- Fergal O'Brien
